Enforcement and Bankruptcy Law allows a creditor to initiate debt collection through one of the following methods, including seizure, bankruptcy, or conversion of liens into cash. The creditor has the right to choose the method and initiate enforcement proceedings against the debtor accordingly.
According to the Enforcement and Bankruptcy Code No. 2004, the creditor can initiate general enforcement without judgment (Example No: 49) against the debtor without needing a court order or a negotiable instrument signed by the debtor, provided that they submit the necessary documents to the Enforcement Office for debt recovery.
Given the long litigation periods in our country, and the bankruptcy risks faced by companies, this type of debt collection is highly effective and valuable, as it allows for a faster recovery of the debt without needing a court ruling.
The debt collection process begins upon submission of a written, verbal, or electronic request to the Enforcement Office. The content of the request, including all necessary information, is outlined in Article 58/2 of the Enforcement and Bankruptcy Code. The creditor must pay the debt collection fees in advance, but these costs are ultimately borne by the debtor.
Unlike enforcement with judgment, in the case of general enforcement without judgment, the creditor cannot freely choose which Enforcement Office to file with. The general rule is that the debtor's place of residence is where the enforcement request should be submitted. If the debtor is a legal entity, the Enforcement Office in the place of registration of the company is responsible. However, there are exceptions based on the circumstances of the case, which could lead to jurisdictional disputes.
Example: Creditor Ahmet lent 50,000 TL to debtor Mehmet with a bank receipt stating the loan was due on 03.10.2024. There is no written agreement between them, but the date of payment is mentioned in the receipt. If Mehmet fails to repay by the due date, the creditor has the right to initiate general enforcement without judgment (Example No: 49) based on the receipt. Mehmet’s residence is in Kadıköy, Istanbul, so Ahmet must initiate the debt collection at the Istanbul Anadolu Enforcement Office.
Once the debt collection request is submitted to the authorized Enforcement Office, a payment order is issued. This payment order is then served to the debtor's legal address (if an individual, their place of residence, or if a company, their registered office address). Once the payment order is delivered, the debtor has a 7-day period to either object or pay. If the debtor neither objects nor makes the payment within this period, the debt collection becomes final.
Creditor Ahmet initiated general enforcement without judgment for a 50,000 TL debt against Mehmet at the Istanbul Anadolu Enforcement Office on 04.10.2024. The payment order and supporting documents were served to Mehmet on 11.10.2024. Since Mehmet did not object or make a payment by the deadline of 18.10.2024, the creditor can request the Enforcement Office to finalize the debt collection.
Once the debt collection is finalized, the Enforcement Office can investigate the debtor's assets, such as movable or immovable property, through the UYAP system. If the debtor has any assets, a seizure can be placed on them.
For example, if the debtor's social security (SGK) record is active, a wage garnishment order can be issued, seizing ¼ of their net salary. If they own real estate, a seizure order can be issued to the Land Registry. Similarly, if the debtor owns a car, a seizure can be placed on the vehicle through the EGM system. Other assets, such as trademarks, can also be seized.
As previously mentioned, the creditor can initiate general enforcement without judgment without needing a court decision, check, promissory note, or bond. However, the debtor is entitled to object to the debt collection within 7 days of receiving the payment order. If the debtor objects, the Enforcement Office halts the collection process.
The creditor can continue the collection process by filing an objection to the objection with the Civil Court, and once the court rules in their favor, the court decision is submitted to the Enforcement Office and the collection process continues. If both parties are traders and the debt collection is based on a current account statement or contract, mediation is required under the Turkish Commercial Code before filing for objection annulment.
In summary, it is important to note that the legal provisions may vary depending on the specific circumstances of each case. Legal rules may change, and it's recommended to contact us for accurate legal advice and to ensure the most effective legal procedure is followed.
Enforcement and Bankruptcy Law is a complex area of law that requires expertise. It is crucial to plan the process correctly, comply with legal procedures, and initiate debt collection through an experienced lawyer to avoid potential losses and ensure a successful outcome.
Contact us: info@kaletanyolac.com
Address: Istanbul, Turkey
Ataköy 7.-8.-9.-10. Kısım Mahallesi, Çobançeşme E5 Yan Yol Caddesi, Ataköy Nef 22, D blok 143, Bakırköy İstanbul, Turkey.
+90 537 321 65 71 info@drenisekincioglu.com
.png)
